Feds announce up to $450 million in aid for research, after sector warned of up to 15,000 job losses

The federal government is promising up to $450 million for Canada’s research community, as institutions have seen their funding shrivel while clinical trials and other research projects have been stunted by the COVID-19 pandemic — and the sector warned of thousands of imminent layoffs.

The new aid package, announced by Prime Minister Justin Trudeau Friday, will provide wage support to universities and health research institutes who couldn’t access other aid programs — even if their work has been suspended.

The feds will provide up to 75 per cent of an eligible staff member’s pay — with a cap of $847 paid out per person, per week. The government will also cover up to 75 per cent of “eligible costs” for research activities deemed essential, like safe storage for dangerous substances and restarting data sets.

“Science and research is our door to a brighter future, and that has never been clearer. But because of the pandemic, many labs have closed or are at risk of imminently closing,” Trudeau told reporters during his daily press conference at Rideau Cottage. The new funding package, according to the government’s news release, will be delivered to institutions as a “block grant.”

Canadian medical research institutes have been on edge since the coronavirus pandemic hit, with millions of dollars in research sponsorships suspended after clinical trials and other projects screeched to a stop — at least temporarily. As reported by iPolitics in March, the University Health Network — the country’s top research hospital — was steeling itself to lose roughly $6 million a month. Their research funding comes from three key streams: government grants, philanthropy and industry. The latter category, given on a per-patient basis, is where the most significant shortfalls were anticipated.

The forecast losses from stalled and stunted research in March, at UHN alone, translated to around 650 salaries, for research associates, coordinators, nurses, lab techs, data managers and other personnel — including some of the staff who had been redeployed from their regular research and clinical trial roles to combat the coronavirus pandemic as it waged on in Toronto.

And the problem rippled out beyond UHN. Ted Scott, vice president of research at Hamilton Health Sciences, reported in March that COVID-19 had caused a “dramatic” impact on their trials and research. “We are very concerned,” he told iPolitics — noting that his chief worry, at that point, was whether they could retain their workforce through the crisis.

Some pivots had already been made within the research realm in efforts to safeguard jobs. The Canadian Institutes of Health Research told iPolitics two months ago that research institutions would be allowed to use their grant money to pay staff members — even in cases where their trials or research had been halted — due to the “exceptional” circumstances of the pandemic.

But for many weeks, health research institutions waited for a new aid package. Several research organizations said that their designation as “public institutions” rendered them ineligible for the federal wage subsidy. Trudeau, just last month, announced a slate of new funding for research and clinical trials, but that aid was focused on responding to the novel coronavirus.

“It is still an urgent and immediate situation for us,” Bradly Wouters, UHN’s executive vice-president of science and research, told iPolitics in April — revealing, at that point, that he and others were working “closely” with the feds on a separate support package. Warnings became starker still this month, as Wouters and HealthCareCan President Paul-Émile Cloutier appeared before the federal health committee.

“On May 1st, we were forced to begin the process to identify staff for a first round of layoffs of roughly 1500 staff because we lacked the funds to pay them,” Wouters warned officials, per HealthCareCAN’s transcription of his remarks. “If trends continue as they have without access to federal supports, we will face large in-year operating deficits, additional layoffs, and insufficient revenues to support our space costs and other overhead costs.”

Days earlier, UHN CEO Kevin Smith had delivered a warning to the government operations and estimates committee — some 10 to 15 thousand job cuts loomed within two weeks if research hospitals didn’t receive aid.

“The federal government can avoid those layoffs by granting research institutes based in healthcare organizations access to the Canada Emergency Wage Subsidy on the same terms as other industries,” Cloutier said on May 6. “This is what we are urging the government to do today – treat us equally.”

Cloutier and Wouters each expressed relief following the announcement Friday. “It’s been a long time coming,” Cloutier told iPolitics in a phone call. “If we hadn’t received any funding, I think it would have been a tragedy.”

Wouters, in a separate telephone interview, said that Ottawa had come in “just under the wire” with their aid news. “We’re obviously extremely pleased the federal government has stepped in — at the last moment, but nonetheless managed to do this before we took major job action,” he told iPolitics. Both men believed the complexity of Canada’s research sector, with UHN alone funded through more than 900 sources, contributed to the lengthy process.

“I have to say, I’m pretty impressed by the people I’ve talked to in the public sector. They genuinely wanted to understand — and I think they did — but it’s a complicated beast. It took a very long time,” Wouters explained. While he cautioned that details were still to come, he praised the new federal aid for addressing what they saw as key issues: namely, wages and restarting costs.

The Ontario Hospital Association, on Friday afternoon, welcomed the announcement as well — but noted in a statement that the speed at which the funding reached hospitals would be “as critical as the announcement itself.”